updated 10:30 pm EDT, Thu May 26, 2011
eBay and PayPal sue Google over trade secrets
eBay and its payment wing PayPal immediately followed up the launch of Google Wallet by suing Google and two executives for allegedly stealing trade secrets to help create the mobile payment technology. The online auction house accused Google's Wallet project lead Osama Bedier of feeding confidential PayPal information to Google to help it create the NFC mobile payment system and of making former eBay executive Stephanie Tilenius break a contract by having her join Google as its VP of commerce in February 2010, a month before she finished a consulting contract with eBay that had followed her exit from full-time work. Bedier also supposedly tried to poach PayPal employees while he was at Google.
The Santa Clara-based legal complaint directly accused Google of betraying a deal. PayPal and Google had been on the verge of completing a deal that would have offered PayPal as a payment option in Android Market. Bedier had been negotiating that deal but was abruptly poached before it could go through, sabotaging the deal and potentially giving Google a wealth of technical knowledge to help Google Wallet, including "major retailers."
"At the very point when the companies were negotiating and finalizing the Android-PayPal deal, Bedier was interviewing for a job at Google -- without informing PayPal of this conflicting position," eBay and PayPal said.
The Wallet system has elements not unlike what PayPal uses. Along with credit card information, a user's virtual cards include the Google Prepaid Card, essentially a virtual account that users can load with money much like with PayPal. By telling retailers how to process payments with that card using APIs (app programming interfaces) and other protocols, Bedier would have not just relayed PayPal's methods to Google but to anyone who wanted to use the Wallet system.
Google hadn't responded to the accusations as of Thursday night. If the claims are found accurate, however, they could jeopardize the existence of Google Wallet itself by portraying the service as tantamount to theft.